Pacific Maritime Magazine - Marine Business for the Operations Sector

Promise of the Arctic 2016: Opportunities and Challenges

 


The 3rd Pacific Maritime Magazine Promise of the arctic conference took place in Seattle on November 2nd and 3rd of 2016. This year’s conference, produced with the partnership of the Institute of the North and the Alaska Department of Economic Development, examined environmental best practices being developed to protect the pristine waters of the Arctic, respond to the economic and cultural needs of the native populations, and enhance economic opportunities for stakeholders in Alaska and the lower mainland.

The two-day conference was presented in panel style, with individuals or small groups of professionals presenting to their expertise, followed by a question and answer period.

US Coast Guard Rear Admiral Mark Butt, Commander of the 13th Coast Guard District, presented the opening remarks, an adaptation of which can be found on page 40 of this issue.

The first panel addressed the US Legislative and Regulatory Climate: Impediments and Opportunities. The discussion, moderated by Nils Andreassen, of the Institute of the North, began with a presentation by Helen Brohl, US Committee on the Marine Transportation System, on Marine Infrastructure Priorities. Ms. Brohl detailed some of the needs determined by a study by the committee, which is available at http://www.CMTS.gov.

The US has substantial political, economic, energy, environmental, security, and cultural interests in the region, and 2015 saw the 4th lowest sea ice extent on record, which called attention to some of the needs not addressed by current US Arctic policy.

Some of the actions recommended by the report include the designation of Port Clarence, 70 miles north of Nome, as an Arctic Maritime Place of Refuge, continued collaboration with Russia on the Bering Strait port access route study, a review of IMO implementation of ship routing measures for Bering Strait and an awareness of areas of heightened ecological and cultural significance that would require waterways management in the Arctic and western Alaska.

Mark Gleason, Director of the Washington Maritime Federation, addressed Arctic Commercial Fishing Considerations, both domestic and international. While the Arctic Management Area, which includes the US portions of the Chukchi and Beaufort Seas, are closed to US commercial fishing for any species of finfish, mollusks, crustaceans, and all other forms of marine animal and plant life. Other Arctic nations have different goals, including Russia, who want regulated, exploratory fishing, and consider a prohibition to be premature without science to back it up. This means that while no commercial fisheries are likely within US EEZ in the near term, discussions will continue.

US Coast Guard Capt. Ben Hawkins discussed the IMO Polar Code, which amends existing international instruments under the IMO and took effect at the beginning of the year.

The aspects of the code addressing safety apply to cargo ships over 500 GT and passenger ships on international voyages in polar waters, while the environmental aspects apply to all ships in polar waters.

Based on these criteria, while foreign vessels and a few US vessels are affected, the majority of the US Arctic domestic fleet is covered under current or pending non-Arctic specific regulations.

A panel on workforce development and interstate collaboration, moderated by John Hakala, in the US Dept. of Labor’s Office of Apprenticeship, included presentations by Sarah Scherer, the new director of the Seattle Maritime Academy, Capt. Terry Federer, of AVTEC-Alaska Maritime Training Center and Brenda Pacarro, with Calista Alaska Native Regional Corporation, who detailed an apprenticeship program developed by the corporation to increase Alaskan hire in the maritime industry while meeting the subsistence needs of the Alaskan lifestyle.

The program has two “pathway options” including a traditional apprenticeship with two months of classroom instruction and six months sea service, or a “hawsepipe” option, which includes the same two months of classroom instruction and six months sea service but adds four months of subsistence, to meet the subsistence needs of the Alaskan lifestyle. Each option is a rotating schedule and must be agreed between employers and apprentices.

A panel moderated by Pacific Maritime Magazine publisher Peter Philips on partnerships between Alaska and the lower 48 included presentations by Curtis Thayer, president and CEO of the Alaska Chamber of Commerce, Joshua Berger, maritime sector lead with the Washington State Dept. of Commerce, Gael Tarleton, who represents Washington State’s, 36th Legislative District and Alaska State Senator Lesil McGuire, who outlined the State of Alaska’s new Arctic policy.

Senator McGuire said the changing conditions in the Arctic would bring new opportunities in shipping, tourism and resource development, and the state has developed a policy to address these challenges and opportunities.

The policy promises to promote economic and resource development, in order to produce returns to the state and communities that ensure community health and vitality.

Addressing response capacity to prepare for incidents will allow communities to respond and develop best practices.

The policy calls for the support of healthy communities without compromising the economic security and well-being of other communities, and promises to strengthen science and research.

McGuire also addressed Alaska’s and Washington’s future, and noted that there is an estimated $100 Billion of private sector funds looking for investment opportunities in the Arctic. She noted that investment in the Arctic is Investment in both states, and advised on the need to provide the incentives to attract that investment.

The first day ended with a panel on maritime infrastructure moderated by Matt Ganley, with the Bering Straits Native Corporation. The final panel included presentations by Commissioner Marc Luiken, Alaska Department of Transportation and Public Facilities, Scott Pattison of the Northwest Seaport Alliance and Gary Watters, with PND Engineers, who described some of the difficulties of shoreside infrastructure development in the Arctic, including the remote locations, which make materials transportation expensive, as well as natural challenges such as large tide swings and the crushing force of ice manmade structures.

On day two, a panel on strategic considerations in maritime operations was moderated by Dermot Loughnane of Tactical Marine Solutions. Capt. David (Duke) Snider, Principal of Martech Polar Consulting, discussed the unique challenges presented by navigation in polar seas, and the danger of underestimating the qualifications required to pilot a vessel in ice-laden waters.

Mike Lauer, director of project services at Foss Maritime, talked about weathering a softening market, and described his company’s strategies to deal with a seasonal and project-based workforce while maintaining high internal standards.

Johan Sperling and Bruce Harland, of Crowley Marine Solutions, discussed the floating US equipment that was ice-capable and available to Arctic operators, and compared it to the inventory of floating and shoreside infrastructure operated by other Arctic nations.

Harland noted that the risk of incidents would increase with more activity, and there is a clear need for infrastructure and equipment capable of operating in the Arctic. He said regional economic development would bring opportunities that would require some form of public-private partnership, and that native stakeholder values would need to be respected.

Craig Allen, with the University of Washington School of Law, moderated a panel on infrastructure development and maritime support. Capt. Richard Brennan, chief of NOAA’s hydrographic surveys division, discussed the dire need for modern survey data in order to identify corridors, passages, ports, landings and harbors of refuge, as well as emerging or changing usage patterns.

George Roe, with the Alaska Center for Energy and Power, described the utility of micro-grids to serve the energy needs of remote communities, while Paul Fuhs, with the Marine Exchange of Alaska, described recent trends in arctic development, and offered a comprehensive survey of arctic coast marine infrastructure, from beach landings and harbors to buoys and dolphins.

Fuhs said Arctic transit shipping is down for 2016. He credited low fuel prices as well as international disputes for the slump. He noted that while destination shipping and infrastructure within Russia is increasing, the same sectors in the US and Canada are flat, and acknowledged that endangered species act (ESA) lawsuits are strangling US Arctic Development.

A panel on opportunities for adventure and cultural tourism moderated by Ethan Tyler, from the Alaska Division of Economic Development, featured a presentation by Dennis McDonnell, with Alaska Coach Tours, who noted that while a destination might have the infrastructure to moor a cruise ship, once 2,500 passengers are disembarked, the town must have the infrastructure to support them.

He said the average passenger is 51 years old and has a household income of $107,000. Successful cruise stops are aware of this and can profit from the experience.

Dermot Loughnane, with Tactical Marine Solutions, offered a look at the 32-day voyage of the Crystal Serenity through the Northwest Passage, and described lessons learned.

A panel on capital projects moderated by Michael Perkinson, of Guggenheim Partners, featured presentations by Hugh Short, chairman and CEO of PT Capital and John Springsteen, with Alaska Industrial Development and Export Authority (AIDEA), a public corporation founded by the state to increase job opportunities and encourage the economic growth of the state, including the development of its natural resources.

Springsteen described some of the services provided by AIDEA and some of the capital projects funded by the program, which include tank farms, aircraft maintenance facilities and fishing vessels.

AIDEA is self funded and receives no general funds. The revolving fund has $1.3 billion in assets and boasts a Standard & Poor’s AA+ credit rating.

The tone of the conference was an overall positive one, as those in attendance recognized the challenges ahead as well as the opportunities that the Arctic presents to the maritime and resource extraction industries.

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